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DECREE No

DECREE No.198-CP ON THE 31st OF DECEMBER 1994, OF THE GOVERNMENT PROVIDING DETAILED REGULATIONS AND GUIDANCE FOR IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LABOR CODE ON LABOR CONTRACT

THE GOVERNMENT

Pursuant to the Law on Organization of the Government on the 30th of September 1992;

Pursuant to the Labor Code on the 23rd of June 1994;

At the proposal of the Minister of Labor, War Invalids and Social Affairs,

DECREES:

Chapter I

SUBJECTS AND SCOPE FOR APPLICATION OF LABOR CONTRACT

Article 1.-

1. The following organizations and individuals shall have to arrange the signing of labor contracts when employing laborers:

a/ The State-run enterprises, private enterprises, joint stock companies, limited liability companies; cooperatives (with laborers who are not co-op members), and individuals and households which employ laborers;

b/ The administrative and specialized agencies, people's organizations and other political and social organizations which employ laborers who are not public and State employees;

c/ The economic organizations of the People's Army and People's Public Security Force which employ laborers who are not officers, non-commissioned officers and soldiers;

d/ The enterprises with foreign-invested capital established under the Law on Foreign Investment in Vietnam; the enterprises operating inside export processing zones and industrial parks; the foreign individuals, organizations and agencies, or international organizations based in Vietnam;

e/ The Vietnamese enterprises, organizations and individuals operating in the territory of Vietnam and employing foreign laborers, except otherwise provided for by international agreements that the Socialist Republic of Vietnam has signed or acceded to;

g/ The organizations and individuals that employ laborers who are pensioners, houseworkers and public and State employees to do jobs which are not banned by the Regulation on Public Employees.

2. The following cases are not regulated by labor contracts stipulated by Article 4 of the Labor Code:

a/ The public and State employees who are working in administrative and specialized agencies of the State;

b/ The State employees who have been appointed as directors, deputy directors and chief accountants at State-run enterprises;

c/ The members of the National Assembly and the full-time members of the People's Councils at all levels; the title holders at legislative, executive and judiciary bodies elected or assigned to terms of office by the National Assembly or People's Councils at all levels;

d/ The officers, non-commissioned officers and combatants of the People's Army or the People's Public Security Force;

e/ The employees at a number of businesses or in special areas under the Ministry of Defense and the Ministry of the Interior, they shall follow the guidance of the Ministry of Defense and the Ministry of the Interior upon agreement with the Ministry of Labor, War Invalids and Social Affairs;

g/ The members of people's organizations, other political and social organizations and cooperatives, including the cadres detailed for Party, trade union and youth work at the enterprises.

Chapter II

FORMS, CONTENTS AND TYPES OF LABOR CONTRACT

Article 2.- The forms and contents of labor contracts made in accordance with Articles 28 and 29 of the Labor Code are provided as follows:

- The written and signed labor contract shall be made in the form issued and managed in a unified manner by the Ministry of Labor, War Invalids and Social Affairs.

- The labor contract whether written or verbal must ensure the contents stipulated in Article 29 of the Labor Code.

In case of a verbal contract, the two parties to it shall agree on a third party witness if they deem it necessary.

Article 3.- The types of labor contract, according to Article 27 of the Labor Code, include:

1. The labor contract without definite term is one that does not spell out a closing date.

This type of labor contract is applied to jobs which are regular and stable for one year or more.

2. The labor contract with terms of from one to three years is one that spells out a fixed period of one or two or three years; this type of contract is applied for jobs which have a definite closing date.

3. The labor contract for a season or for a certain job lasting less than one year is applied for jobs which are temporary and are to be completed in several days or serveral months or less than one year, or for temporary replacement of employees who have to discharge military duty or other citizen duties stipulated by law, who take maternity leave, who are temporarily detained or jailed, or for cases of temporary suspension of labor contract agreed upon by both parties.

Chapter III

SIGNING, CHANGING, TEMPORARILY SUSPENDING AND TERMINATING LABOR CONTRACT

Article 4.- The signing of a labor contract under Articles 30 and 120 of the Labor Code is stipulated as follows:

1. The labor contract is signed directly between the laborer and the employer, or between the employer and the legally mandated representative of a group of laborers. In case it is signed by the legally mandated representative, a list with the name, age, permanent address, profession and signature of each laborer must be attached. This labor contract has the validity of one signed separately with each of the laborers, and is applied only to do a certain job which is seasonal, or which will terminate in less than one year, or which has a definite term of from one to three years.

2. The laborer can sign many labor contracts with many employers if he/she is capable of implementing those contracts. For labor contracts which are signed with pensioners or with organizations or individuals that employ less than 10 laborers or which are for jobs lasting less than three months, the benefits of the laborers are included in their wage (work payment).

3. In professions and jobs for which employment may include children under 15 years of age as provided for in Article 120 of the Labor Code, the labor contract shall only be valid if it is signed with the written consent of their parents or tutors.

Article 5.- The employer and the laborer shall agree on the probation which, according to Article 32 of the Labor Code, is as follows:

1. The probation period shall not exceed 60 days for jobs with a professional title which require professional standards and techniques of university level or higher.

2. The probation period shall not exceed 30 days for jobs with a professional title which require laborers of secondary professional standard, technical workers and specialized staffs.

3. The probation period shall not exceed six days for other laborers.

4. At the end of the probation for jobs stipulated in Items 1, 2 and 3, the employer has the responsibility to announce the result to the laborer. If he/she has passed it is not notified of the result while continuing his/her work, he/she shall automatically become an official laborer, and the two parties have to sign a labor contract.

Article 6.- The validity and the modifications of the labor contract under Article 33 of the Labor Code are provided as follows:

1. The written labor contract shall become effective from the date of its signing or from a date agreed upon by both parties; the verbal labor contract shall become effective from the date the contracted laborer starts work.

2. In the course of the implementation of the labor contract, if a party proposes a change to its content without the consent of the other party, either the signed contract shall continue to be implemented or both parties may agree to terminate it, in accordance with Articles 37 and 38 of the Labor Code.

Article 7.- The temporary transfer of laborers to jobs outside their profession under Article 34 of the Labor Code is provided as follows:

1. When the employer runs into unexpected difficulty in work, production and business due to his/her occupation with overcoming consequences of natural calamities or fire; due to his/her application of natural calamities or fire; due to his/her application of preventive or controlling measures against labor accidents or occupational diseases; due to disruption of power or water supply; or due to demands of production and business, he/she has the right to temporarily transfer the laborer to a job which is not in line with his/her profession, but for a total of not over 60 days a year. Within this period, if the laborer refuses to obey the decision of his/her employer, he/she shall not be entitled to the suspension allowance stipulated in Item 2, Article 62, of the Labor Code, and may be disciplined in accordance with the provisions of Article 84 of the Labor Code.

2. In the event the employer transfers the laborer to a job which is not in line with his/her profession for a total of more than 60 days a year, he/she must have the consent of the laborer; if the laborer does not accept it and is consequently suspended, he/she shall be entitled to payment stipulated in Item 1, Article 62, of the Labor Code.

Article 8.- The temporary deferment of the implementation of the labor contract under Article 35 of the Labor Code is provided as follows:

1. The temporary deferments of the implementation of the labor contract which are agreed by both parties, shall occur in the following cases:

a) The laborer applies to go and study in the country or abroad.

b) The laborer applies to go and work for a definite period for a organization, agency or individual in the country or abroad.

c) The laborer is transferred to work full time at the council of a State-run enterprise.

d) The laborer requests an unpaid leave to solve his/her personal affairs.

2. At the end of the temporary deferment of the implementation of the labor contract in cases stipulated in Points (a) and (c), Item 1, Article 35, of the Labor Code, the laborer has to report to work, and the employer shall have to give him/her a job. If the laborer has reported to work on time and still has to wait for assignment, he/she is entitled to salary as stipulated in Item 1, Article 62, of the Labor Code.

If the laborer fails to report to work for more than 7 days after the end of the temporary deferment of his/her labor contract without a plausible reason, he/she shall be dealt with in accordance with the provision of Point (c), Item 1, Article 85, of the Labor Code.

3. The laborer who is temporarily detained or placed under custody shall, at the end of the temporary deferment of the implementation of his/her labor contract, be dealt with as follows:

a) If the temporary detainment or custody is directly related to the labor relations:

- At the end of his/her temporary detainment or custody, or when the Court rules that he/she is not guilty, his/her employer shall reinstate him/her in his/her old job, and pay in full his/her salary and other benefits which are his/her due during his/her temporary detainment or custody, in accordance with Decree No 197-CP of the 31st of December 1994 of the Government which gives detailed provisions and guidance for the implementation of a number of articles of the Labor Code on salary.

- In case the laborer is proved guilty but is exempted from prosecution or imprisonment by the Court, or is not banned from doing the old job by the Court, his/her employer shall, depending on the nature and degree of his/her offence, assign him/her to his/her old job or to a new one.

b/ If the temporary detainment or custody of the laborer is not directly related to the labor relations, at the end of his/her temporary detainment or custody, his/her employer shall assign him/her to his/her old job or to a new one.

Article 9.- If the laborer unilaterally terminates the labor contract, he/she shall have to compensate for the expenditure for his/her professional training, in accordance with Item 3, Article 41 of the Labor Code.

Article 10.- The severance allowance at the termination of the labor contract under Article 42 of the Labor Code:

1. The laborer shall be paid a severance allowance at the end of his/her labor contract, in accordance with the provisions of Articles 36, 37 and 38, or Item 1, Article 41, of the Labor Code. The employer shall have to pay him/her a severance allowance for the period he/she has worked for the enterprise, agency, organization or an individual.

In case the termination of the labor relations is done under the provisions of Item 1 of Article 17, Item 2 of Article 41, Points (a) and (b), Item 1, of Article 85 and Article 145 of the Labor Code, the laborer shall not be paid the severance allowance.

2. The fund for severance allowance:

a) For business enterprises, it is integrated in the production cost or circulation expenditure.

b) For non-business agencies, organizations or individuals, it is defrayed by self-generated sources.

3. The working time for calculating severance allowance:

a) The working time for calculating severance allowance is the total length of time the laborer has practically spent on working for the employer under the laborer contracts, including verbal contracts.

b) For a laborer who was once a State employee and who now is still working for his/her of unit, the total working time for calculating his/her severance allowance is the total time length of his/her work at that unit.

c) In case the laborer spent time working for other units of the State sector before working for an enterprise, agency or organization, these units are responsible for paying his/her severance allowance for the time he/she worked for them. This sum of money shall be issued by the old unit to pay for the laborer upon notice of the unit where the laborer is working. In case the old unit has been dissolved or is meeting with financial difficulties, the severance payment shall be covered by the State budget.

d) Apart from the above-said period, the following periods of time are also accounted as working time of the laborer:

- The probation or apprenticeship at the enterprise, agency or organization (if any);

- The period of time during which the enterprise or agency organizes in-service training courses or sends laborers elsewhere for training;

- The time of leave and rest the laborer takes under social insurance policy and the Labor Code;

- The period of time the laborer spends waiting for job at the end of temporary deferment of the labor contract or during which he/she is on paid suspension of works;

- The period of time the laborer spends on training and practice at the enterprise;

- The period of time of temporary deferment of the implementation of the labor contract as stipulated in Article 35 of the Labor Code shall be agreed upon by both parties;

- The period of time for which the laborer is wrongly fined or has his/her labor contract unilaterally terminated;

- The period of time during which the laborer is temporarily suspended under the provisions of Article 92 of the Labor Code.

4. The wage plus wage subsidies (if any) for calculating severance allowance are stipulated in Decree No 197-CP of the 31st of December 1994 of the Government giving detailed provisions and guidance for the implementation of a number of articles of the Labor Code on wages.

5. The odd months are calculated as follows:

- The period of from one month to seven months is taken as six working months;

- The period of from 7 months to 12 months is taken as a working year.

6. The laborer shall be paid a severance allowance at the level stipulated in Item 1, Article 42 of the Labor Code, directly and wholly at his/her place of work and in time as provided for by Article 43 of the Labor Code.

Article 11.- The responsibility of each party to the termination of a labor contract is provided for by Article 43 of the Labor Code.

The time limit for the payments related to the interest of each of the parties shall follow the provisions of Article 43 of the Labor Code.

With regard to the following special cases: the laborer has worked in different enterprises stipulated in Point (c), Item 3, Article 10 of this Decree; the enterprise has terminated its operation, or one of the two parties has suffered from natural calamity or fire, which necessitates the payment of severance allowance and compensation and the clearance of othe debts, the payment and clearance shall not last for more than 30 days from the date of the termination of the labor contract.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 12.- The labor contracts, which were signed prior to the effective date of the Labor Code and embody contents which are not compatible with the Labor Code, must be amended and/or supplemented; which provisions are more beneficial to the laborer than those of the Labor Code shall continue to be implemented. The amendments and supplements to the laborer contract must be done within six months at the latest from the effective date of this Decree; beyond that date, all the labor contracts made prior to the 1st of January 1995, must automatically comply with the provisions of the Labor Code and this Decree.

The public and State employees who are regularly working in State-run enterprises shall change to work under the regime of labor contracts without definite terms.

Article 13.- This Decree takes effect as from the 1st of January 1995. Decree No. 165-HDBT of the 12th of May 1992, of the Council of Ministers, which gives detailed provisions for the implementation of the Ordinance on Labor Contract and other Government documents on labor contract, is now annulled.

Article 14.- The Ministers, the Heads of the agencies at ministerial level, the Heads of the agencies attached to the Government, and the Presidents of the People's Committees of the provinces and cities directly under the Central Government are responsible for implementing this Decree.

On behalf of the Government

Prime Minister

VO VAN KIET